Low-cost, low-value care accounts for a substantial amount of unnecessary spending

stethoscope, coins and calculator
The high volume of low-cost, low-value services offers fertile ground for policymakers and clinicians looking for a foothold in the reduction of unnecessary healthcare spending. (photo credit:Getty/mckare)

Inexpensive low-value medical services add up to major waste in the healthcare system. A new study suggests policymakers and clinicians interested in reducing costs without affecting patient satisfaction should look to reduce them.

A statistical analysis of 2014 data drawn from beneficiaries of private insurance companies in Virginia identified $586 million in unnecessary spending on low-value services. Low-cost services accounted for 65% of that total.

The results, reported in Health Affairs, offer deeper insight into an ongoing profusion of unnecessary tests and procedures. Previous research has suggested the problem is more pronounced among hospital-based primary care clinics, especially when patients see someone other than their own physician.

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While some estimates of overall waste related to excessive testing have been as high as $200 billion, the algorithm used to parse the Virginia data identified only 2.1% of the state’s overall costs as unnecessary, though the authors note that their cost estimates occupy the conservative end of the scale and do not capture downstream costs.

The value of cost-distribution data lies in its potential to spur relatively easy, effective changes, according to the report’s authors, who were led by John N. Mafi, assistant professor of medicine at the David Geffen School of Medicine, University of California, Los Angeles. That’s because the systemic cost of low-value, low-cost services comes from the very high volume of those services provided: the Virginia data identified 1.7 million low-value services in total. Low-cost services accounted for 1.6 million of them.

Targeting low-cost procedures for reductions offers a practical, relatively non-controversial path toward greater efficiency because the process partly relies upon incremental actions across a broad number of clinicians.

“Although changing any physician practice pattern (including the delivery of routine and low-cost services) is notoriously difficult, even a modest decrease in the use of low- and very-low-cost low-value services could lead to savings,” the authors write. By avoiding higher-profile fights over the low value of particular high-cost services, the authors conclude that chipping away at the volume of low-cost, low-value services may offer “a more strategic way to catalyze the movement to tackle the problem of low-value care.”

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